There are a lot of different ways that you can start to prepare your finances for retirement. Most people already know about contributing to their retirement plan and saving as much money as possible. While these are all these things that every person should take advantage of, there are other options available to future retirees as well. One of those options to save for retirement is to purchase investment property. Let’s take a look at a few of the ways that investment property can be used to help you retire.
Generate an additional income stream
Investment properties are great for giving you a consistent income stream during your retirement years. You can buy a property and rent it out to a tenant. You can get a home loan from a bank and use the tenant’s payments to make your mortgage payments and pocket some additional money in the process. The key to doing this is to compare home loans. Shop around for the best deal until you find an interest rate and payment that makes buying a rental property work for you.
Sell your property investment for revenue
You always have the option of selling your rental property when you retire. Homes are incredibly affordable right now and may not be this cheap for years to come. You can get a great deal on real estate at a time when many investors are strapped for cash. If you purchase a property now at these low prices and sell it twenty to thirty years in the future, you could make quite a bit of money. This money can be used to fund your retirement and allow you to live out your retirement years off of a wise property investment.
Property investing provides diversification
As this MoneyCentral article states, real estate is a good investment for a retirement portfolio. Real estate offers diversity from the stocks, bonds, and cash allocations that typically make up retirement portfolio. The performance of real estate is not tied to these other assets so investors can make money when other asset classes are struggling. Real estate offers long term appreciation opportunities that can make money for investors.
Use your existing equity for cash
It is still possible to refinance home loans in the current market. If you buy a property and have built up a whole lot of equity in it, you could always take this money out at a later date. A property investment will give you extra avenues of equity to tap into and allow you to take out some money for when you really need it. You can get the bonus of owning the property and getting cash out of it without having to sell. This money can be really useful during retirement when cash will be needed.
You can see that property investing can be a very smart move for the retiree looking to enjoy a comfortable retirement. Whether it is selling property in your later years or simply renting it out, you can tap into the money that ownership provides you.
This is a guest post by Jack Anderton.